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The IMF is dismantling Argentina all over again

Part
2 - Argentina’s Long Relationship With the IMF, From 1976 to Today

The IMF
has a long history of strong-arming the direction of Argentina’s
policies and economy, beginning with the military junta in 1976 that
tortured, killed, and disappeared 30,000 people in the span of six
years. The junta largely targeted the left and the country’s poor
and working class as they implemented a series of neoliberal
policies, a tactic that journalist Naomi Klein discusses in depth in
her book, The Shock Doctrine.

Despite
the human toll of Argentina’s genocide, the IMF was willing to look
the other way as long as the junta followed their policy
prescriptions. As Paul Cooney explained: “just one week
after the military coup of March 1976, and without having to
negotiate or send a delegation, the Argentinian junta was able to
obtain over US $100 million from the IMF. In addition to this show of
support for a government willing to implement and impose neoliberal
policies with an iron hand, the IMF came through with the largest
loan ever to a Latin American country (US $260 million), just five
months later.”

Meanwhile,
Isabel Perón, the country’s president from 1974 to 1976 until she
was ousted by the military coup, was unable to secure funds from the
IMF. Her agenda, it would seem, was not to their liking. This is what
Tricontinental: Institute for Social Research Director Vijay
Prashad calls an investment strike; the idea that credit is only
available to countries who follow neoliberal policies.

Governments
that stray—or are perceived to stray—from this agenda are
deprived from access to credit by the world’s financial
institutions. In other words, the banks and credit lenders go on a
strike of sorts, withholding funds and access to credit until their
neoliberal policy prescriptions are met.

But,
unlike labor strikes—where the demands are centered around
conditions to improve the lives of the majority—investors, through
their strikes, “insist on cuts to national budgets paid for by
taxes on workers and peasants and lower living standards for workers
and peasants.” They use their leverage— capital—to increase
their own wealth at the expense of the people who produce it—the
majority of the world’s population.

When
countries faithfully go along with these conditions and implement
neoliberal policies, debt is allowed to disappear from the records,
and credit is extended (such as when US $10 billion disappeared from
the records out of a total of US $40 billion during negotiations
between the IMF and military junta, or when the IMF loans to
Argentina were extended from $50 billion to $57.1 billion in
September 2018 under Macri).

Should
the policy direction change to show any inclination of a
people-driven agenda, however, access to credit quickly disappears
and a variety of tactics are used to destabilize “uncooperative”
administrations—whether through the “unconventional wars” that
we have seen recently in Venezuela and Brazil, or in Salvador
Allende’s Chile, or through military intervention.

The IMF
continued to ‘guide’ the country’s policies after the
dictatorship under Carlos Menem (1989-1999). It was Menem’s
neoliberal policies that led the country into the straits of the
Great Depression of 1998 to 2002 when the country set a record for
the largest debt default in history up to that point.

In 2001,
unemployment neared 20 percent and, by 2002, 53 percent of the
country was living below the poverty line. It wasn’t until the
Kirchner administrations from 2003 to 2015 that Argentina began to
pull back from the grip of the IMF (Nestor Kirchner, 2003-2007, and
Cristina Fernández de Kirchner, 2007-2015). In these 13 years, as
Mark Weisbrot of CEPR explained in a recent interview, the poverty
rate was reduced by 70 percent, extreme poverty by 80 percent, and
unemployment fell from 17 percent to 6.5 percent.

In
contrast, in the three years since the beginning of Macri’s term,
unemployment has increased to 8.5 percent. In Weisbrot’s view, the
Kirchners “did very well after the terrible experience with the
IMF, which was one of their worst depressions from 1998 to the
beginning of 2002. That’s why they were popular, and that’s why
Cristina was re-elected. If she could have run again, she would still
be there.”

The
sharp turn of Macri’s administration is all the more painful with
the recent memory of the country’s struggles with the IMF and a
glimmer of what life could be like if the country were to free itself
of the shackles of neoliberalism.

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